Finanial Formala and Statements

Balance Sheet

Company’s assets, Liabilities and Equity

Cash Flow Statement

Shows inflows and outflows of Cash

Contribution Margin

Revenue-Variable Cost: or Gross margin

Current Ratio

Current Assets / Current Liabilities: Ability to pay short term obligations

Days inventory outstanding (DIO)

Inventory / Avg Daily COGS: How long holds inventory

Days Sales outstanding (DSO)

Accounts Receivable / Avg Daily Sales: How long to collect pay

Days Payable outstanding(DPO)

Accounts Payable / Avg Daily COGS: How long to pay suppliers

Debt-to-equity ratio

Total Debt / Total Equity: debt to shareholder equity

Inventory Turnover

Annual COGS / Inventory: How often inventory is completely sold

Leverage ratio

Total Assets / Total Equity: How much assets are paid by debt

Return on assets (ROA)

Annual Net Income / Total Assets : How effectively uses asset to generate profit

Return on sales (ROS)

Operating Income / Net Sales: percentage of profit earned per dollar of sales

Return on equity (ROE)

Annual Net Income / Total Equity: measure of return on owner’s investments

Working Capital

Current Assets - Current Liabilities

Income Statemnet

Outline revenue and expenses and calculating net income/loss

Contribution Marin Ratio

Contribution Margin / Sales: percentage of sales after variable costs

Working Capital Days

(Working Capital / Revenue)*365